Strong EBITDA growth of EUR 1.2 billion (+14%) and investments of almost EUR 1 billion, 80% of which were sustainable. Proposed dividend of 11.88 euro cents/share with an 8% increase over the previous year and 60% pay-out.

Main indicators

• Gross Operating Margin (EBITDA) in the amount of EUR 1,197 million (+13.5% compared to EUR 1,055 million as at 31/12/2022). The EUR 142 million increase in EBITDA is mainly driven by the full recovery of the Market BU, hydroelectric generation, and the full contribution of the integrated companies (SEI Toscana and Acquaenna), despite a substantial inflationary scenario and high volatility in the energy scenario.
• Group net profit attributable to shareholders of EUR 255 million (up 12.8% compared to EUR 226 million as at 31/12/2022). The result for 2023 includes EUR 41 million in provisions for risks related to the Sostegni Ter Decree-Law. It is also recalled that the 2022 result included the negative impact of the Solidarity Contribution of an estimated EUR 27 million.
• Net financial debt at EUR 3,932 million (+18% compared to EUR 3,347 million as at 31/12/2022). The increase in debt, as a result of investments in the period, occurred in proportion to the growth in EBITDA, confirming the net debt/EBITDA ratio at 3.3x.
• Investments amounted to EUR 934 million, of which EUR 867 million were technical investments to improve the efficiency of distribution networks, develop waste treatment plants and increase renewable generation capacity, and EUR 67 million were M&A investments.
• Dividend of 11.88 euro cents/share, up 8% on the 2022 dividend and with a pay-out of 60%.
• ESG performance was positive, with waste sorting increasing to more than 71%, water losses decreasing to 30%, and electricity production from renewable sources increasing by 35% by 2022.
• The total number of Iren employees at the end of 2023 is more than 11,000 (+420 during the year).

The Board of Directors of IREN S.p.A. today approved the consolidated financial statements as at 31 December 2023.

Luca Dal Fabbro, Chair of the Group, said: "We today approve important results with EBITDA up by 14% and a net profit increase of 13%: this once again highlights the validity of Iren's business model and its ability to rapidly adapt to changes in the macroeconomic, climate and energy scenario, providing customers and citizens with increasingly high-quality services. This attitude reinforces Iren's role as a reliable partner in the energy transition and in creating value for the territory and communities as well as for its shareholders: the results just approved allow us to propose a dividend with a strong growth of 8% and equal to 11.88 euro cents/share, with a pay-out of 60%. Despite important investments, which have allowed us to achieve the renewable capacity target of 800MW and the start-up of new plants in circular economy, we managed, thanks to the cash flows generated and the excellent management of net working capital, to limit the increase in debt by maintaining the NFI/EBITDA ratio at 3.3x. Finally, we proudly announce that we have recruited over 1,100 people in the year just ended."

"We will close 2023 with several ESG indicators ahead of the targets set in the Business Plan" said Iren’s Deputy Chairman, Moris Ferretti. "I refer, for example, to exceeding 71% separate waste collection in historical territories, a 15% increase in renewable energy sold to end customers, and a reduction in water losses of around 30%. It was also an important year thanks to the strengthening of activities in Tuscany, which will follow in 2024 with the consolidation of Sienambiente activities. These results are the fruit of the work of more than 11,000 people, an increase of 420 compared to 2022, who devote themselves daily to the development of the territories, supporting them concretely and demonstrating how Iren can be the partner of reference for administrations for major projects."

Paolo Signorini, Chief Executive Officer and General Manager of the Group, said: "In the year just ended, Iren hit all the main targets of the Business Plan and Budget for 2023 in terms of investments, EBITDA, NFI/EBITDA ratio and net profit. The Group confirms its position as one of the leading players in terms of investments, achieving an increase in Net Invested Capital of EUR 635 million (10% over CIN 2022) in the financial year, which is essential to ensure an adequate and stable Return On Investment."

IREN GROUP: CONSOLIDATED RESULTS AT 31 December 2023

Consolidated revenues as at 31 December 2023 amounted to EUR 6,490.4 million, down -17.5% compared to EUR 7,863 million in 2022. The main factors contributing to the decline in sales were energy revenues, which were affected for more than 1,229 million euro by lower commodity prices and for about 286 million euro by a reduction in volumes due to the climatic effect, with a very mild winter, and a reduction in energy demand. Instead, contributing to the positive change in turnover are energy efficiency activities such as energy upgrading and the renovation of buildings, favoured by tax breaks (approximately +115 million). Finally, changes in the scope of consolidation affect revenues by approximately 140 million euro and refer to the consolidation of Valle Dora Energia (from June 2022), SEI Toscana (from July 2022) and AcquaEnna (from June 2023).

Gross operating profit (EBITDA) amounted to EUR 1,196.9 million, up +13.5% compared to EUR 1,054.7 million in 2022. The margin for the period was positively impacted by the change in consolidation scope for approximately 25 million euro (mainly referring to the company SEI Toscana), organic growth related to increases in tariff revenues in distribution services and the commissioning of the Reggio Emilia organic waste fraction (OFMSW) treatment plant. Marketing activities for both electricity and gas benefited from the full recovery of margins (EUR +189 million), which had been particularly penalised by the dynamics of the energy scenario in FY 2022. A substantial improvement was also achieved with regard to the generation scenario (around +61 million euro), in which the trend in hydroelectric sales prices and the electrical cogeneration margin made it possible to absorb the sharp drop in opportunities on the MSD dispatching market, which was also sharply reduced at national level. On the other hand, FY 2023 was characterised by a contrasting trend in energy volumes, where an important increase in volumes of electricity generation from thermoelectric and hydroelectric sources, the latter resulting from good hydraulicity of the period, is contrasted by a sustained reduction in heat volumes sold as a consequence of the mild climate trend and a reduction in unitary consumption as a consequence of the “high bills” measure. Also negatively affecting the margin for the period were higher costs due to inflationary effects that will be recovered, in the regulated sectors, in the coming tariff periods, and the reduced availability of some waste treatment plants for maintenance activities.

Overall, the margin with reference to the individual business units is broken down as follows: the Market business unit improved strongly (with an increase of more than 100%), Energy +4.2%, Environment -7.1%, Networks -9.3%.

Operating profit (EBIT) amounted to 464.6 million euros, essentially in line (+0.2%) with the 463.7 million euros in FY 2022. During the period, there was higher depreciation and amortisation of approximately 78 million euro related to the commissioning of new investments and the expansion of the scope of consolidation, greater provisions made to the provision for doubtful debt for approximately EUR 8 million, lower release of provisions of about EUR 16 million, and higher provisions for risks of about EUR 55 million, of which EUR 37 million related to the compensation mechanisms provided for in the Decree-Law "Sostegni Ter". Without these extraordinary provisions, EBIT would have amounted to approximately EUR 506 million, a considerable improvement compared to the pro forma EUR 468 million in 2022 (+8.1%).

Group net profit attributable to shareholders amounted to EUR 254.8 million, an increase (+12.8%) from the result recorded at 31/12/2022. The 2023 figure is affected by an increase of approximately EUR 31 million in financial expenses, due to higher interest expenses from borrowing and charges for the assignment of tax credits from Superbonus, partially offset by higher financial income of EUR 14 million. Income taxes of EUR 97 million, down from 2022, benefit from the positive effect of the non-taxability of tax credits, which counteract the energy costs of energy-intensive companies. In addition, the 2023 figure is compared with the 2022 result, which included higher financial expenses on derivatives in the amount of EUR 21 million, as a result of the unexpected regulatory change in the ARERA index for gas and heat (from Pfor to PSV) and the full negative impact of the Solidarity Contribution estimated at EUR 27 million, of which EUR 3 million related to the 2023 Budget Law.

Net financial debt stood at EUR 3,931.8 million as of 31 December 2023, an increase (+17.5%) compared to the 31 December 2022 figure. In this regard, the investments made in the period contributed to the growth of net debt, which remained contained thanks to actions to optimise working capital, including better payment terms for gas supply, and the assignment of credits related to energy efficiency works (Superbonus 110%). The increase in debt is proportional to the growth in the Group's operating results, confirming the NFI/EBITDA ratio of about 3.3x, in line with the financial sustainability targets set in the Plan.

Gross investments for the period amounted to EUR 933.5 million, down (-22.7%) compared to 2022, of which EUR 867 million was technical investments and EUR 67 million investments related to M&A transactions. Last year's figure was higher mainly due to the inorganic investment component, which had included the acquisition of Puglia Holding's photovoltaic parks.

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